Cut­ting edge

The Herald Business - - Front Page -

RED tape is prob­a­bly the topic which makes small busi­ness own­ers in par­tic­u­lar the hottest un­der the col­lar. How­ever, the phrase is bandied about in the most gen­eral of ways with­out much ex­pla­na­tion of ex­actly what the prob­lems are and their source.

This lack of specifics is not help­ful to the busi­ness case. If howls of an­guish about “red tape” come forth ev­ery time the gov­ern­ment at­tempts to im­prove so­ci­ety’s lot through the likes of bet­ter ma­ter­nity or pa­ter­nity rights, the gen­eral pub­lic is likely to put th­ese protests into the “heard it all be­fore” cat­e­gory.

Nei­ther are th­ese huge multi-bil­lion-pound fig­ures dreamed up by lob­by­ing groups, of the to­tal cost of in­creased red tape, par­tic­u­larly mean­ing­ful. How do they re­ally know?

In this is­sue of The Her­ald Busi­ness mag­a­zine, we at­tempt to shine some light into what, through a lack of mean­ing­ful de­bate, has be­come rather a dull sub­ject.

Per­haps most il­lu­mi­nat­ing, given Brus­sels bu­reau­crats seem to be the usual whip­ping boys of the busi­ness lobby through­out the UK, is that Scot­tish f irms are par­tic­u­larly con­cerned about the i mpact of in­creased reg­u­la­tion from Holy­rood.

It al­ways ap­peared in­evitable when the Scot­tish Par­lia­ment came into be­ing in 1999 that the reg­u­la­tory bur­den on busi­nesses would in­crease.

As with man­age­ment in a com­pany, an­other layer al­ways cre­ates more bu­reau­cracy as those in the new tier at­tempt to put their own stamp on things whether it is needed or not.

How­ever, the busi­ness com­mu­nity fears the Scot­tish Par­lia­ment is not even try­ing as hard as Lon­don or Brus­sels to take the shears to its own reg­u­la­tion. So it is not sur­pris­ing red tape has gone from be­ing the fifth-great­est con­cern of busi­nesses three years ago to the num­ber two worry.

What is im­por­tant in all of this is not to brand all reg­u­la­tion bad. Busi­nesses may at times be over-crit­i­cal of reg­u­la­tion which may ac­tu­ally help them in the long term.

Too lit­tle at­ten­tion is paid to the loy­alty of em­ploy­ees who know the busi­ness inside out, the his­tory of things and the cus­tomers.

So, longer pe­ri­ods of ma­ter­nity leave, pa­ter­nity leave rights, and an abil­ity to re­turn to work part-time, even if they hit the whinge but­ton of the busi­ness lobby in the short term, might ac­tu­ally be good in the longer run.

A more loyal and bet­ter-equipped work­force would surely help firms grow rev­enues, if they could keep their eyes off the cost line long enough.

Like­wise, on the new age dis­crim­i­na­tion leg­is­la­tion, one gets the feel­ing that older work­ers have some­times been over­looked. How­ever, th­ese are the peo­ple with the ex­pe­ri­ence.

Then again, there are other ar­eas in which it ap­pears the red tape is wound too tight.

One hears the tales of how the reap­pear­ance of a sin­gle bird af­ter many months can cause great de­lays to the build­ing of i mpor­tant power in­fra­struc­ture. And there are far more ridicu­lous sit­u­a­tions than this on the reg­u­la­tory front, and other in­stances of down­right ir­rel­e­vance.

It is im­por­tant that red tape is split be­tween that which is for the greater good and that which serves no pur­pose, and the lat­ter dis­carded.

When reg­u­la­tion is for the greater good, it should be made as easy as pos­si­ble. Those who make it should pay par­tic­u­lar at­ten­tion to the im­pact on small busi­nesses be­cause they have the fewest peo­ple to share an in­creased bur­den. About 93% of Scot­land’s 270,000 firms em­ploy less than 50 peo­ple.

It all seems sim­ple enough in the­ory, but his­tory would dic­tate it is al­to­gether a dif­fer­ent mat­ter in prac­tice.

Ian McCon­nell is Busi­ness Ed­i­tor of The Her­ald

IAN McCON­NELL It is im­por­tant that red tape is split be­tween that which is for the greater good and that which serves no pur­pose – and the lat­ter dis­carded

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